Medtronic's Q2 Earnings & Revenues Beat Estimates, Stock Climbs

Medtronic plc MDT reported second-quarter fiscal 2026 adjusted earnings per share (EPS) of $1.36, which rose 7.9% from the year-ago quarter’s figure and beat the Zacks Consensus Estimate by 3.82%.

Without certain one-time adjustments — including amortization, restructuring and associated costs, certain litigation charges and acquisition-related costs, among others — GAAP EPS was $1.07 compared with 99 cents in the year-ago period.

MDT’s Revenues

Worldwide revenues in the reported quarter totaled $8.96 billion, up 6.6% year over year on a reported basis and 5.5% organically. The top line surpassed the Zacks Consensus Estimate by 1.11%.

Following the announcement today, MDT shares rose 1.7% in premarket trading.

Segmental Analysis of MDT’s Q2 Revenues

The company reports revenues under four major segments — Cardiovascular, Medical Surgical, Neuroscience and Diabetes.

In the fiscal second quarter, Cardiovascular revenues increased 9.3% organically to $3.44 billion.

Within this, Cardiac Rhythm & Heart Failure sales totaled $1.83 billion, up 14.3% year over year organically. Revenues from Structural Heart & Aortic rose 6.6% organically to $956 million. Coronary & Peripheral Vascular revenues grew 0.8% organically to $655 million.

Medtronic PLC Price, Consensus and EPS Surprise

Medtronic PLC price-consensus-eps-surprise-chart | Medtronic PLC Quote

In the Medical Surgical portfolio, worldwide sales totaled $2.17 billion, up 1.3% year over year organically. While Surgical & Endoscopy revenues edged up 1.1% organically to $1.68 billion, Acute Care & Monitoring revenues jumped 2% to $493 million.

In Neuroscience, worldwide revenues of $2.56 billion were up 3.9% year over year organically. Cranial & Spinal Technologies sales amounted to $1.30 billion, up 4.7% year over year organically. Specialty Therapies revenues totaled $744 million, up 0.3% year over year organically. Neuromodulation revenues grew 7.3% organically to $520 million.

Revenues in the Diabetes group rose 7.1% organically to $757 million.

MDT’s Q2 Margin Performance

The gross margin in the reported quarter expanded 90 basis points (bps) to 65.8% despite a 3.9% rise in the cost of products sold (excluding amortization of intangible assets).

Research and development expenses rose 8.2% year over year to $754 million. Selling, general and administrative expenses jumped 7.5% to $2.97 billion.

The adjusted operating margin expanded 50 bps year over year to 24.3%.

Medtronic’s Updated Fiscal 2026 Outlook

For fiscal 2026, Medtronic now projects organic revenue growth of 5.5% (previously, an approximate 5%). The Zacks Consensus Estimate for fiscal 2026 worldwide revenues is pegged at $35.83 billion.

Full-year adjusted EPS is now expected in the range of $5.62-$5.66 (previously $5.60-$5.66). The Zacks Consensus Estimate for the year’s adjusted earnings is pegged at $5.63.

Our Take on MDT Stock

Medtronic exited the second quarter of fiscal 2026 on a solid note, with both earnings and revenues beating estimates. Impressively, the quarter registered the strongest Cardiovascular revenue growth in more than a decade, excluding the pandemic. The expansion of both margins is also encouraging. Notable wins include FDA approval for the Altaviva device, a simple option for treating urge urinary incontinence, which affects more than 16 million people in the United States. The company also secured FDA clearance for the MiniMed 780G system to enable integration with Abbott’s Instinct sensor as well as approval for the use of the system in Type 2 diabetes.

Medtronic says it is positioned for even greater acceleration of revenue growth in the back half of the year and beyond, driven by several enterprise growth drivers, including the pulsed field ablation franchise for Afib, the Symplicity procedure for hypertension, the Hugo robotic-assisted surgery system and Altaviva therapy for urge urinary incontinence.

MDT’s Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, Insulet PODD and Boston Scientific BSX.

Medpace, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%. You can see the complete list of today’s Zacks #1 Rank stocks here.

MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 14.28%.

Insulet, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted EPS of $1.24, exceeding the Zacks Consensus Estimate by 9.73%. Revenues of $706.3 million topped the Zacks Consensus Estimate by 4.42%.

PODD has an estimated long-term earnings growth rate of 28.4% compared with the industry’s 13.2% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 17.75%.

Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outperformed the Zacks Consensus Estimate by 1.9%.

BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.

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This article originally published on Zacks Investment Research (zacks.com).

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